London close: Stocks close higher as Brexit worries subside

The FTSE 100 ended higher on Friday as campaigning on the European Union referendum was suspended until Saturday following the death of a British MP.

Labour MP Jo Cox was shot and stabbed in her constituency town of Birstall near Leeds, allegedly by local resident Tommy Mair, who is reported to have shouted “Britain First” as he attacked her. There was a sense among market participants on Friday that the incident could sway public opinion back towards a Remain vote.

“One of the triggers for the change in market sentiment appears to be the suspension of Brexit campaigns following tragic killing of MP Jo Cox. The suspension of campaigns just means Brexit can temporarily move to the sidelines,” CMC Markets analyst Jasper Lawler.

“The killer is reported to have said ‘Britain First’ before shooting the MP, who was a strong believer in Britain remaining in the European Union. If true, it could tarnish the image of pro-Brexit supporters.”

Morgan Stanley said the probability of a vote to Remain in next Thursday's EU referendum stands at 55%, based on the expectation of a late swing in the polls. In this event, which is the bank’s base case, it expects to see a stock rally that could push the FTSE 100 up 14% from its current level.

The pound bounced back 0.51% to $1.4276 at 1647 BST.

In the eurozone, European Central Bank Benoit Coeure said the bloc was at risk of suffering a “lost generation” because of high youth unemployment as he criticised European countries for poor implementation of reform recommendations.

ECB President Mario Draghi was also due to give a speech in late afternoon trade with investors looking out for any clues on policy.

In the US, Federal Reserve St. Louis president Jim Bullard said just one interest rate hike is needed through 2018 due to stagnant economic growth.

On the economic data front, US housing starts fell a little less than expected in May, according to data from the Commerce Department. Housing starts slipped 0.3% to a seasonally-adjusted annual rate of 1.16m versus expectations of a decline to 1.15m.

Meanwhile, oil prices recovered, with Brent crude up 2.5% to $48.44 per barrel and West Texas Intermediate up 2.4% to $47.38 per barrel at 1641 BST.

Among corporate stocks, banks were the best performers as worries about Brexit abated somewhat with Lloyds, Barclays and Royal Bank of Scotland in the black

Lloyds was the standout gainer, however, after announcing on Thursday that it had won a UK Supreme Court ruling, ending a long-standing dispute about whether it was within its rights to buy back high-yielding bonds at par value.

Housebuilders also advanced as fears about the EU referendum receded for the time being. Taylor Wimpey, Barratt Development and Berkeley Group jumped.

On the downside, precious metals miners Randgold Resources and Fresnillo were under pressure as investors took profits following recent gains, after the price of gold rallied.

National Grid was also under the cosh as MPs called for the company to be split up to create an American-style independent operator system.

Market Movers

FTSE 100 (UKX) 6,008.96 0.98%
FTSE 250 (MCX) 16,388.08 2.22%
techMARK (TASX) 2,961.61 0.53%

FTSE 100 - Risers

Lloyds Banking Group (LLOY) 65.05p 6.01%
Standard Chartered (STAN) 524.40p 5.14%
Barclays (BARC) 165.75p 4.57%
Taylor Wimpey (TW.) 176.00p 4.45%
TUI AG Reg Shs (DI) (TUI) 1,001.00p 4.22%
Wolseley (WOS) 3,685.00p 4.15%
Anglo American (AAL) 636.50p 3.94%
Berkeley Group Holdings (The) (BKG) 3,065.00p 3.90%
Royal Bank of Scotland Group (RBS) 222.10p 3.69%
Persimmon (PSN) 1,935.00p 3.59%

FTSE 100 - Fallers

Randgold Resources Ltd. (RRS) 6,610.00p -4.55%
Unilever (ULVR) 3,069.00p -1.19%
Shire Plc (SHP) 3,956.00p -1.08%
Diageo (DGE) 1,767.50p -0.90%
British American Tobacco (BATS) 4,111.00p -0.83%
GlaxoSmithKline (GSK) 1,387.50p -0.82%
Fresnillo (FRES) 1,224.00p -0.73%
ARM Holdings (ARM) 968.00p -0.62%
Paddy Power Betfair (PPB) 8,630.00p -0.52%
Sage Group (SGE) 591.00p -0.51%

FTSE 250 - Risers

Shawbrook Group (SHAW) 243.40p 10.14%
International Personal Finance (IPF) 274.90p 9.83%
CLS Holdings (CLI) 1,545.00p 9.03%
Aldermore Group (ALD) 190.00p 8.57%
Melrose Industries (MRO) 414.40p 8.03%
Restaurant Group (RTN) 337.50p 7.59%
Crest Nicholson Holdings (CRST) 546.50p 7.05%
Ted Baker (TED) 2,714.00p 6.93%
Essentra (ESNT) 521.00p 6.63%
Riverstone Energy Limited (RSE) 870.00p 6.49%

FTSE 250 - Fallers

Evraz (EVR) 109.50p -5.77%
Centamin (DI) (CEY) 111.10p -3.89%
Acacia Mining (ACA) 336.80p -2.46%
Allied Minds (ALM) 337.70p -2.40%
Softcat (SCT) 340.00p -0.93%
Aveva Group (AVV) 1,605.00p -0.93%
The Renewables Infrastructure Group Limited (TRIG) 96.30p -0.93%
TalkTalk Telecom Group (TALK) 215.60p -0.92%
Brown (N.) Group (BWNG) 223.80p -0.89%
Croda International (CRDA) 2,827.00p -0.63%